There are a number of specific items to look for when
selecting an insurance policy. In random order, they include the following:

The Company

Price should only be a minor consideration when purchasing insurance for your boat. Of
primary concern should be the rating, experience in yacht insurance, and financial
stability of the insurance carrier, "the company".

The rating should be "A" or better and the company should be admitted to
conduct business in your state. The companys assets should total around the hundred
of millions if not the billions, and the company should have a proven track record of at
least 10 years of experience insuring yachts.

Some companies see yacht insurance as attractive and jump into the market for a year or
two until they realize that because of their inexperience in the field theyre losing
money and jump out quickly. Although there are no guarantees, if the company has been
conducting yacht insurance business in your area for at least 10 years, you should have
some confidence. If not, look elsewhere.

Price

In this business, if it sounds too good to be true, it probably is. Dont buy
price, buy quality. Quality will be remembered long after price is forgotten.

The Agent

Your agent is the most important factor in the marine insurance equation and you should
ask your agent these questions:

How long have you (agent) been boating? (Many years is good.)

How long has your agency been in business? (Many, many years is good.)

Will you personally handle any claims I have? (Yes, is good.)

Do you deal directly with the insurance companies or do you deal through a managing
general agency? (Dealing direct is very good.)

In other words, buy a quality insurance policy from an agent who is a long-time boater,
has been in business for a period of years you feel comfortable with, an agent who gets
involved with claims processing, and an agent who deals directly with the company and not
a middleman.

There are some items to look for when selecting an insurance policy. In random order
they include the following:

Insuring Agreement

Remember that an insurance policy is a contract. So ask yourself, "Under
what conditions does the insurance company agree to insure me?" This is usually very
straightforward, but look out for words like "reasonable care" and "due
diligence." These are terms youre apt to find in "cheap"
insurance-that is, a policy that insures you on the condition that you never screw up.

Cause of Loss

The key question to ask yourself here is "What can happen to my boat that the
policy does not cover?" Ideally, you should be buying an All Risk yacht policy. An
All Risk policy doesnt restrict you to Names Perils - that is, your coverage isn!t
limited by a list of what is covered. Instead, it covers you for everything except that
which is specifically exluded.

For example, suppose you bought a Named Peril policy that included a seemingly
innocuous exemption, which stated that your yacht is not covered in the case of a
"collision with a motor vehicle." Whats to worry about? you chuckle to
yourself. How could that happen? Well consider this scenario. Your boat is hauled out for
its annual bottom painting. The yards forklift backs into the braces supporting your
yacht, and your twin-hulled love crashes to the pavement suffering substantial damage.
Thats an onshore, vehicular accident. Are you and boat covered or not? Under an All
Risk policy, youre covered.

Exclusions

There are going to be a few things that your All Risk policy does not cover. For
example, every marine insurance policy includes standard exclusions pertaining to damage
that is confined to, or results from, or results from,

the following: wear and tear, gradual deterioration, marring, denting, and scratching.
In other words, the company will not buy you a new engine simply because the
original one eventually wears out. Nor will the policy reimburse you for hull fittings
that are eaten away by electrolysis, or compensate you for the cost of hiring someone to
clean your hulls or buff out gelcoat scratches.

However, when checking the wording of a policys exclusions, be on the lookout for
the term "indirectly." If you find that term, consider it a warning bell as to
the true extent of the policys coverage. Read the rest of the policy very, very
carefully, as it is more likely to contain other warning-bell terms such as "damage
caused by mechanical breakdown" or (hard to believe, but Ive seen this
exclusion in a boating insurance policy) "water damage!" In my opinion, neither
of those should qualify as exclusions.

Subsequential Loss

What this means is that you will be covered if one part of your boat suffers damage due
to the failure of another part of the vessel. For example, if a swage fitting fails and
that leads to the mast collapsing, do you want to be reimbursed just for the swage fitting
or for the entire collapsed mast? And what about the damage sustained by the sails and the
deck due to the failed mast? If you dont specify Subsequential Loss as part of your
policy, its quite possible that the policy youll be sold will only cover the
swage fitting.